Addition done without referring the valuation to the DVO: Court restored the file to AO for valuation

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Addition done without referring the valuation to the DVO: Court restored the file to AO for valuation

 

There are various cases wherein the purchase and sale is done below the stamp duty valuation. It called for the addition in the hands of the purchaser as well as seller. The remedy in such a case is the power of the AO to refer it to the Departmental Valuation Officer (DVO) for valuation. However, this is not done in various cases by the AO due to the assessment proceeding getting time barred.

The case details is as under:

RAM SARAN YADAV vs. INCOME TAX OFFICER

(2022) 36 NYPTTJ 972 (Raipur)

Let us have a short overview of the case:

The issue was with regard to taxation of income as Income from other source regarding the Chargeability on purchase of land.

There was an addition on account of difference in actual purchases price as compared to SDV of alleged land on date of transfer.

Assessee requested to the AO to transfer the matter to the DVO for valuation of the alleged land under s. 50(2) before applying s. 56(2)(vii)(b)(ii.

AO rejected the plea of the assessee.

AO made disallowance under s. 56(2)(vii)(b)(ii) rejecting the request of the assessee to refer the matter to the DVO because he has to complete the assessment to avoid delay in completing the assessment.

CIT(A) also affirmed the view taken by the AO as the assessee could not produce the evidence by way of sale deeds last executed before getting the plots transferred from the other member of joint venture.

Assessee submitted that the assessee is having all the required documents, and, therefore, the issue may be restored back to the file of AO for limited purpose to decide the same after referring the matter to the DVO for valuation of the alleged land.

In view of said fact, AO is required to refer the matter to the DVO for determining the full market value of the alleged land.

Accordingly, the issue is remitted to the file of AO for limited purpose to decide the issue afresh after getting valuation report from the DVO for determination of full market value of the alleged land.

The court has followed the Prem Chand Jain vs. Asstt. CIT (2020) 207 TTJ (Jp) 629 : (2020) 194 DTR (Jp)(Trib) 37 : 117, 370 (Jai)(Trib).

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